Note 7 - Shareholders' Equity

6 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

7.

Shareholders

’ Equity

The Company

’s authorized capital stock consists of

30,000,000

shares of common stock and

15,000,000

shares of preferred stock. As of 

December 31, 2018,

we had

6,357,113

shares of common stock outstanding, including

456,666

 

share

s of unvested restricted stock. 

No

shares of preferred stock have been issued. The remaining restricted stock outstanding will vest between 

January 2020

and

January 2021.  

In

September 2016,

the Company distributed a Private Placement Memorandum to its warrant holders to give them the opportunity to exercise their warrants at a reduced exercise price and receive shares of common stock, par value

$0.01

per share of the Company by paying the reduced exercise price in cash and surrendering the original warrants.

  The offering applied to warrant holders with an exercise price of

$10.00

per share originally issued in

March 2013.

The offering gave the warrant holders the opportunity to exer

cise the warrants for

$9.00

per share. The offer expired on

November 15, 2016.

In conjunction with the offering, a total of

587,500

warrants were exercised resulting in total cash to the Company of

$5.3

million. Of the total warrants exercised,

83,334

were exercised by entities controlled by Mr. Brad Juneau, the Company’s Chairman, President and Chief Executive Officer. Proceeds from the exercise of the warrants will be used for working capital purposes and for funding future obligations to the Joint Venture Company.

On 

October 13, 2017,

the Company distributed a Private Placement Memorandum to its warrant holders to give them the opportunity to exercise their warrants at a reduced exercise price and receive shares of common stock, par value

 

$0.01

 per share of the Company by paying the reduced exercise price in cash and surrendering the original warrants.  The offering applied to warrant holders with an exercise price of 

$10.00

 per share originally issued in

March 2013.

The offering gave the warrant holders the opportunity to exercise the warrants for 

$9.50

 per share. The offer expired on

November 10, 2017. 

In conjunction with the offering a total of

124,999

warrants were exercised resulting in total cash to the Company of

$1.2

million.  Proceeds from the exercise of the warrants will be used for working capital purposes and for funding future obligations to the Joint Venture Company.  

In connection with the exercise offer, the Company entered into a Registration Rights Agreement dated as of

November 10, 2017,

with each investor who exercised warrants in the offering. The Company agreed to file up to

two

demand registration statements w

ith the SEC at any time after expiration of the offer but before

three

years after expiration of the offer in order to register the resale of shares of Common Stock, issued in the offer. In addition, the Registration Rights Agreement granted certain piggyback rights to the investors. 

During fiscal year 

2018,

580,999

 warrants were exercised resulting in the issuance of

404,923

shares of common stock and total cash to the Company of

$2.3

 million.  All of the outstanding warrants have been exercised.

On

October 23, 2017,

the Company completed the issuance and sale of an aggregate of

553,672

shares of common stock, par value

$0.01

per share, of the Company at a purchase price of

$19.00

per share of Common Sto

ck, in a private placement (the “Private Placement”) to certain purchasers (the “Purchasers”) pursuant to a Stock Purchase Agreement dated as of

October 23, 2017 (

the “Purchase Agreement”), by and among the Company and each Purchaser. The Private Placement resulted in approximately

$10.5

million of gross proceeds and approximately

$10.0

million of net proceeds. The Company will use the net proceeds from the Private Placement for working capital purposes and for funding future obligations to the Joint Venture Company.  Petrie Partners Securities, LLC (“Petrie”) acted as sole placement agent in connection with the Private Placement and received a placement agent fee equal to

6.50%,

which was reduced to

3.25%

 for existing stockholders and other Purchasers referred by those existing stockholders, or a total of

$0.5

million in placement agent fees.  Juneau Exploration L.P., which is controlled by 

Brad Juneau, the Company

’s President and Chief Executive Officer, purchased

13,200

shares of Common Stock in the Private Placement for a price of

$250,800

and on the same terms and conditions as all other Purchasers.  

The shares sold in the Private Placement were issued in reliance on an exemption from registration under the Securities Act of

1933,

as amended, pur

suant to Section

4

(

2

) thereof. The bases for the availability of this exemption include the facts that the issuance was a private transaction which did

not

involve a public offering and the shares were offered and sold to a limited number of purchasers.

  Pursuant to a Registration Rights Agreement dated as of

October 23, 2017 (

the “Registration Rights Agreement”), by and among the Company and the Purchasers, the Company agreed to file up to

two

demand registration statements with the Securities and Exchan

ge Commission at any time after

one

year after the Private Placement but before

three

years after the Private Placement in order to register the resale of the shares of Common Stock.  In addition, the Registration Rights Agreement granted certain piggyback rights to the Purchasers.

 Rights Plan

On Decembe

r 

19,

2012,

the Company adopted a Rights Plan which was amended on

March 21, 2013,

September 29, 2014,

December 18, 2014, 

 

November 11, 2015, and April 22, 2018.  

On

April 22, 2018,

the Company and Computershare Trust Company, N.A., as Rights Agent, entered into an Amendment

No.

5

(the “Amendment”) to the Rights Plan.  The Amendment, among other things, amends the Rights Plan to (i) extend the term of the Rights Agreement for

one

year until

December 19, 2019;

and (ii) decrease the stock ownership threshold at which the rights become exercisable from

twenty-three

percent (

23%

) to

fifteen

percent (

15%

), which is the same as the original percentage when the Rights Plan was adopted in

2012.

  The Amendment also provides for certain other conforming and technical amendments to the terms and provisions of the Rights Plan.  The Company has engaged advisors to assist in determining the strategic direction of the Company and its alternatives.

Under the terms of the amended Rights Plan, each right (a “Right”) will entitle the holder to purchase

1/100

 of a share of Series A Junior Preferred Stock of the Company (the “Preferred Stock”) at an exercise price of

$80

 per share. The Rights will be exercisable and will trade separately from the shares of common stock if a person, or group, acquires beneficial ownership of

15

% or more of the Company’s common stock.  

Under the terms of the Rights Plan, Rights have been distributed as a dividend at the rate of

one

Right for each share of common stock that was held as of the close of business on

December 

20,

2012.

Stockholders will

not

receive certificates for the Rights, but the Rights will become part of each share of common stock. An additional Right will be issued along with each share

of common stock that is issued or sold by the Company after

December 20, 2012.

The Rights are scheduled to expire on

December

 

19,

2019.